Islamabad: The International Monetary Fund (IMF) is reviewing the Federal Board of Revenue’s (FBR) strategy to expand the tax net and enforce compliance as part of efforts to generate Rs250 billion in additional revenue. The discussions are taking place during the IMF’s ongoing review mission in Islamabad amid a significant Rs604 billion revenue shortfall in the first eight months of the fiscal year.
A key element of the FBR’s plan is the Tajir Doost Scheme, aimed at bringing retailers into the tax system. Additionally, the FBR is implementing the Compliance Risk Management (CRM) framework at Large Taxpayer Units (LTUs) in Islamabad, Karachi, and Lahore. To strengthen documentation, the FBR has also integrated its data with 145 agencies and is expanding compliance improvement measures across 36 more cities.
To enhance enforcement, the FBR is introducing AI-driven tax audits, selecting 3-5% of six million tax returns for review. However, full implementation of these audits will take time. Independent auditors have also been hired to improve oversight. Other measures include digital invoicing, track-and-trace mechanisms, and stricter enforcement to curb tax evasion.
The IMF is also assessing Pakistan’s tax penalty structure to design a General Anti-Avoidance Rule (GAAR) for improved compliance. Meanwhile, discussions continue on broader fiscal adjustments for 2024-25 and the framework for the 2025-26 budget. If an agreement is not reached at the staff level, negotiations may extend until the budget is approved by Parliament.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
